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Delay on health care subsidies case

The Obama administration on Tuesday received an additional thirty days to file its answer in the Supreme Court to a new challenge to the subsidies so far given to nearly five million individuals to help them afford health insurance.  The Court’s clerk, acting on an administration request, set a new filing deadline on that document for October 3.

Ordinarily, most requests for an extension of time to respond to a petition for certiorari are routinely granted, but the challengers to the subsidies system in the new Affordable Care Act had urged the Court not to allow any delays in a case that they say needs early action by the Justices.  Millions of dollars in what the challengers consider to be legally questionable tax subsidies are being paid out each month, they have said.

The petition in King v. Burwell, filed July 31, is contesting a ruling by the U.S. Court of Appeals for the Fourth Circuit upholding tax subsidies for individuals who obtain health coverage on a marketplace (“exchange”) that is operated by the federal government.  The government runs such exchanges in thirty-four states, after those states declined to set up their own.

That Fourth Circuit decision conflicts directly with a ruling by the U.S. Court of Appeals for the District of Columbia Circuit, declaring that the subsidies are available only to those who shop for coverage on an exchange run by a state government — that is, in only sixteen states.

The administration has asked the D.C. Circuit to reconsider the issue before the en banc court, but that plea has not yet been acted upon.  In the letter asking the Supreme Court for more time to file a brief in opposition in King v. Burwell, the Justice Department said that en banc request is “directly relevant” to the Court’s consideration of the Fourth Circuit case.

If the D.C. Circuit were to reopen the case there before the en banc court, that could raise the possibility that the outcome could be different, thus eliminating the conflict that now exists.

In its request for additional time in the Supreme Court, the government also indicated that it needs a chance to prepare answers to the friend-of-the-Court briefs that it said it has been told will be filed in support of the challengers.  Finally, the request said, a delay of a month would not significantly slow down the Court’s consideration of the case pending there.

Although the challengers, in telling the Court that they were opposed to any delay, had asked the Court’s clerk to refer any government request for an extension to the full Court for action, the clerk did not do so, instead following the usual procedure for dealing with such requests.

The resolution of the subsidies dispute is vital to the potential economic success of the new health care law, because the loss of subsidies for low-income individuals seeking insurance on the federal exchanges would reduce significantly the pool of newly insured that would make the individual coverage program work out in practical terms for the health care insurance industry.

If the Supreme Court does step in to decide that question, it could do so in time for a ruling in the current Term, if it accepted for review any time up to about mid-January.

Recommended Citation: Lyle Denniston, Delay on health care subsidies case, SCOTUSblog (Sep. 2, 2014, 5:16 PM),